Marathon Oil Corp. (NYSE:MRO)

The financial data reveals several notable trends over the examined five-year period. Total assets, both reported and adjusted for goodwill, display a consistent downward trajectory from 2017 through 2021. Reported total assets decreased from approximately $22.0 billion in 2017 to about $17.0 billion in 2021, representing a reduction of around 23%. The adjusted total assets follow a very similar pattern, indicating minimal impact from goodwill adjustments on the overall asset base.

Stockholders’ equity, reported and goodwill-adjusted, shows a slight initial increase followed by a decline and partial recovery in the later years. Reported equity rose modestly from roughly $11.7 billion in 2017 to $12.1 billion in 2019, then declined significantly to approximately $10.6 billion by 2020, maintaining this level through 2021. The adjusted stockholders’ equity mirrors this pattern closely, suggesting that goodwill adjustments have limited influence on equity figures as well.

Net income exhibits considerable volatility throughout the period. Reported net income was substantially negative in 2017 at about -$5.7 billion, shifted to positive territory in 2018 and 2019, with $1.1 billion and $0.5 billion respectively, then swung back to a loss in 2020 at approximately -$1.5 billion, before returning to positive territory in 2021 at around $0.9 billion. The adjusted net income follows this trend with slight differences, specifically a less negative loss figure in 2020 (-$1.36 billion compared to -$1.45 billion reported), reflecting the goodwill adjustment impact on earnings.

Overall, the company’s asset base and equity have been contracting steadily in recent years, while profitability has been notably unstable. The fluctuation in net income, including a severe loss in 2017 and 2020, suggests periods of operational challenges or impairment events, partially mitigated in 2021 with resumed profitability. Goodwill adjustments have had a relatively minor effect on the financial statement totals, indicating that most changes are attributable to core asset and earnings variations rather than intangible asset revaluations.

Net Profit Margin

The net profit margin exhibited significant volatility over the analyzed period. An extremely negative margin was observed in 2017, followed by a strong recovery in 2018 reaching positive territory at 18.57%. This positive trend declined in 2019 to 9.48%, then sharply reversed in 2020, with a substantial negative margin near -47%. In 2021, there was a rebound to a positive margin of 16.89%. The adjusted net profit margin closely mirrors the reported figures, indicating limited impact from goodwill adjustments on profitability margins.

Total Asset Turnover

Total asset turnover ratio reflected variability across years, starting low at 0.20 in 2017, improving to 0.28 in 2018, then slightly decreasing to 0.25 in 2019. A decline was noted in 2020 with a ratio of 0.17, followed by a notable increase to 0.33 in 2021. The adjusted ratios were identical to reported values, suggesting goodwill did not affect asset utilization metrics.

Financial Leverage

Financial leverage showed a gradual downward trend over the period. Starting at 1.88 in 2017, the ratio decreased consistently each year to reach 1.59 by 2021. This decline suggests a reduction in reliance on debt financing. The adjusted financial leverage values were nearly identical to the reported figures, indicating negligible goodwill impact on the capital structure assessment.

Return on Equity (ROE)

The company's ROE experienced significant fluctuations. The return was deeply negative in 2017, improving to a modest positive level in 2018 of approximately 9%. A decline occurred in 2019 to just under 4%, followed by a sharp negative return in 2020 close to -13%. In 2021, ROE recovered to nearly 9%. Adjusted ROE values are slightly lower in negative years but overall follow the same trend, showing some influence from goodwill adjustments on equity profitability.

Return on Assets (ROA)

ROA displayed a pattern consistent with profitability trends. It started negative at around -26% in 2017, turned positive to above 5% in 2018, and declined gradually over the next two years to slightly above 2% in 2019 and negative 8% in 2020. Recovery was observed in 2021 with a return to positive 5.57%. Adjusted ROA figures were marginally more favorable in negative years, indicating some adjustment benefits when goodwill is excluded from asset base.

The financial data reflects fluctuations in net income and profit margins over the five-year period ending in 2021.

Net Income (Loss)

The reported and adjusted net income show identical values throughout the period, indicating that adjustments did not materially affect net income results. In 2017, the company experienced a significant loss of $5,723 million. This was followed by a recovery in 2018 with positive net income of $1,096 million and a decline in 2019 to $480 million. In 2020, net income dropped back into negative territory at -$1,451 million (reported) and slightly less negative at -$1,356 million (adjusted). By 2021, net income returned to positive results at $946 million.

Net Profit Margin

The reported and adjusted net profit margins also track closely, with only minor differences in 2020. In 2017, the profit margin was deeply negative at -130.87%, reflecting the large net loss relative to revenue. This turned positive in 2018 to 18.57%, then decreased to 9.48% in 2019. The margin again became negative in 2020, with a reported value of -46.85% and an adjusted value slightly improved at -43.78%. In 2021, the profit margin rebounded to 16.89%. This indicates volatility, with profitability substantially affected during 2017 and 2020, followed by recoveries in intervening years.

Overall, the data reveals a pattern of significant earnings volatility, with major losses in 2017 and 2020 interrupting otherwise positive profitability. The company demonstrated resilience in returning to profitability after losses. Adjustments for goodwill and other factors had minimal impact on the net income and profit margin figures, as reflected in the close correspondence between reported and adjusted values across all years.

Over the analyzed period, total assets, both reported and adjusted, demonstrate a consistent declining trend. Reported total assets decrease from 22,012 million US dollars in 2017 to 16,994 million US dollars in 2021. Adjusted total assets follow a similar pattern, moving from 21,897 million US dollars in 2017 down to 16,994 million US dollars in 2021. This steady decrease suggests ongoing asset reductions or asset write-downs during these years.

Total asset turnover ratios, both reported and adjusted, show fluctuations rather than a consistent trend. The ratio improves from 0.20 in 2017 to 0.28 in 2018, then declines slightly to 0.25 in 2019, followed by a significant drop to 0.17 in 2020. In 2021, the ratio rebounds sharply to 0.33, the highest level observed in the period. This variability in asset turnover indicates changes in the efficiency with which assets are generating revenues, with a notable dip in 2020 potentially reflecting operational challenges or market impacts, followed by a substantial recovery in 2021.

Total Assets

Both reported and adjusted figures show a clear, steady decline over the five-year period, decreasing by approximately 23% from 2017 to 2021.

Total Asset Turnover Ratio

This ratio displays variability, with an initial increase through 2018, a gradual decline through 2020, and a strong recovery in 2021, indicating fluctuating asset utilization efficiency over time.

The financial data reveals several notable trends in assets, equity, and financial leverage over the period from 2017 to 2021. Total assets, both reported and adjusted for goodwill, exhibit a consistent downward trajectory. Reported total assets declined from $22,012 million in 2017 to $16,994 million in 2021, reflecting a reduction of approximately 23%. The adjusted total assets follow an almost identical pattern with values marginally lower but converging by the end of the period.

Stockholders' equity shows a somewhat fluctuating pattern with an initial increase followed by a decline and slight recovery. Reported equity increased from $11,708 million in 2017 to a peak of $12,153 million in 2019, then decreased to $10,561 million in 2020 before a moderate rise to $10,686 million in 2021. Adjusted equity mirrors these movements closely, with only a small difference noted in initial values but matching the reported values in the latter years.

The financial leverage ratios, which measure the extent of debt relative to equity, display a generally decreasing trend. Beginning at 1.88 in 2017, the reported financial leverage ratio reduces over time to 1.59 in 2021, suggesting a gradual deleveraging or reduced reliance on debt financing. The adjusted financial leverage ratio experiences the same trend with identical values, indicating that the goodwill adjustment has no significant impact on leverage in this context.

Total Assets

Steady decline from 2017 to 2021, decreasing by about 23%. Reported and adjusted assets converge, indicating minimal goodwill impact on total asset valuations.

Stockholders’ Equity

Initial increase until 2019 followed by a decline and partial recovery in 2021. Reported and adjusted equity values are closely aligned, highlighting stable accounting treatment regarding goodwill.

Financial Leverage

Gradual reduction over the period, signifying a decrease in financial risk through lower debt relative to equity. No difference between reported and adjusted figures demonstrates goodwill adjustment does not affect leverage ratios.

Net Income (Loss) Trends

The net income figures show significant volatility over the five-year period. In 2017, the company experienced a substantial loss, which sharply reversed to a positive income in 2018. This positive trend declined in 2019, followed by another loss in 2020, before returning to profitability in 2021. The adjusted net income values closely mirror the reported results, indicating minimal impact from goodwill adjustments on profitability figures.

Stockholders’ Equity Patterns

The reported stockholders’ equity remained relatively stable from 2017 through 2019, with slight increases each year. However, there was a noticeable decline in 2020 followed by a marginal recovery in 2021. The adjusted equity values are slightly lower than the reported figures in the earlier years but converge in the later years, suggesting that goodwill adjustments had some reducing effect on equity before stabilizing.

Return on Equity (ROE) Behavior

ROE demonstrates a pattern consistent with net income fluctuations, exhibiting negative returns in 2017 and 2020 and positive but moderate returns in the other years. The adjusted ROE values are closely aligned with the reported ROE, indicating that goodwill adjustments have a minimal effect on this profitability ratio. The sharp negative ROE in 2017 is followed by improvement in subsequent years, but the returns remain relatively low and unstable.

Overall Insights

The financial performance over the period reflects a company experiencing challenges with profitability and equity value stability. The alternation between losses and gains suggests exposure to volatility in earnings. The small differences between reported and adjusted values imply that goodwill adjustments do not significantly alter the financial position or profitability indicators. The partial recovery in 2021 points to potential stabilization after a period of financial difficulty.

Net Income (Loss)

The reported net income exhibits significant volatility over the observed periods. A substantial loss was recorded in the initial year, followed by a recovery to positive earnings in the subsequent two years, a return to negative territory in 2020, and a rebound to positive net income in 2021. The adjusted net income follows a similar trajectory, indicating that adjustments, likely related to goodwill, have a limited impact on the overall profitability pattern.

Total Assets

Both reported and adjusted total assets display a consistent downward trend across the five-year span. The decrease in reported total assets from over $22 billion to below $17 billion suggests asset base reduction. The adjusted total assets are slightly lower than reported figures but closely mirror the same declining pattern, reinforcing the observation of a shrinking asset base over time.

Return on Assets (ROA)

The return on assets figures, both reported and adjusted, follow a trajectory that reflects the income performance. Initially, a large negative ROA corresponds to the significant loss reported in the first year. This improves to positive values in 2018 and 2019, declines into negative again in 2020, and recovers in 2021. The adjusted ROA is slightly more conservative during the negative periods but aligns closely with the reported percentages during positive years, indicating limited distortion from goodwill adjustments.

Overall Trends and Insights

The financial performance demonstrates considerable fluctuations, with substantial losses and recoveries occurring intermittently. The persistent decline in total assets may point to asset sales, impairment, or restructuring efforts. Despite the volatility, profitability as measured by ROA recovers in the latest period, suggesting an improvement in asset utilization efficiency. Goodwill adjustments have a minimal impact on income and asset-related metrics, indicating stable accounting treatment of intangible assets over this time frame.